Q2 2020 23 July, 2020 April and May significantly impacted by - PowerPoint PPT Presentation

Q2 2020 23 July, 2020

April and May significantly impacted by Covid-19, strong pick-up in June expected to continue Gross revenue (EUR million) 27.4 26.6 26.5 26.0 2.7 3.7 4.4 3.5 22.5 20.9 6.7 3.0 0.9 7.1 6.6 7.4 4.2 4.6 18.1 15.9 15.8 15.6 15.1 14.9 Jan Feb Mar Apr May Jun All markets Spain excl. REO Spain REO 2

Aligning costs with market activity • Temporary workforce reductions of ~400 employees during Q2 Actions to align costs to activity • Executive team salary reductions in Q2 extended through Q3 level Temporary price reductions from IT vendors • • Norwegian operation reduced from five to two sites Site consolidation HQ to increase • Sweden closing one of two sites efficiency • Further consolidation under consideration EUR ~25m • EUR ~13m expected in H2 2020 estimated annual • EUR 1.2m restructuring costs in Q2 2020 savings for 2020 • Legal costs driven by activity in notary offices and bailiffs Further cost saving initiatives Scalable setup to take advantage of further reopening of the • depends on economies activity level • Potential new lockdown may significantly impact return to normality 3

NPL revaluation in Q2 of -2.4% NPL book value • Net negative revaluation of EUR 27m of NPL EUR million portfolio 1,134 1,107 Extensive review of all portfolios in all countries 27 • -2.4% Based on estimated short-term financial impact of • Covid-19 • Expected overall collection from 2021 onwards remain largely unchanged Pre revaluation Revaluation Closing book value 4

REO impairment in Q2 of 22.7% REO book value • Estimated impairment of EUR 26m on REO EUR million assets 115 Based on updated commercial analysis taking prudent • view of current trends in the market -22.7% 26 • Impairment test with external valuation support to be 89 conducted in the second half 2020 to validate initial assessment Lower asset prices observed in the market • Lower price growth expectations • Pre impairment Impairment accrual Closing book value 5

Covenant update 1 Waiver obtained to exceed the leverage ratio covenant for Q2 and Q3 on the main bank facility 2 In compliance on all loan agreements as of Q2 2020 with waiver 3 Reopening of markets and improving collection significantly reduces risk of covenant breach for the second half 2020 6

Covid-19 country update • Significant impact from legal systems being closed first half of the second quarter Spain • Gradual ramp-up from mid May expected to continue into Q3 • Significant impact from legal systems being closed first half of the second quarter Italy Lock-down restrictions reduced from June with increasing 3PC flow from customers • NPL collection has remained strong, 3PC with slightly lower volumes • Norway • Short-term resilience against Covid-19 Germany • Revenue has remained stable, although the field service operation was temporarily suspended Limited impact on NPL collection, while disrupted sales processes slows 3PC ramp-up • Finland Bailiff temporary adjusting collection level to reduce stress on debtors • • No significant impact on collection due to Covid-19 as economy has remained open Sweden • Continued back log at bailiff, expected to be resolved by end of 2020 7

Ramping up activity levels as markets reopen • Nordics less impacted than expected • Gradual ramp-up in Spain and Italy • Increasing 3PC sales expected in H2 as sales processes HQ normalize • Expects shift towards positive cash flow after investments during H2 due to lower investments and higher Cash EBTIDA • Total investment level in 2020 in excess of EUR 200 million secures significant volume growth going into 2021 8

Financials Q2 2020

Lockdowns and impairments significantly affected Q2 financials T otal revenue development EBITDA and EBITDA-margin Cash EBITDA (EUR million) (EUR million and %) (EUR million) 60 55 90% 50 45 67 40 65 41% ** 35 29% 30% 36% 31% 32% 25% 60 75 59 74 30 40% 72 20% 21% 68 25 26 64 24 23 ** 20 22 48 20 20 45 15 44 56 * 56 54 14 41 10 11 -10% 49 10 5 33 0 -5 -10 29 -60% -15 -20 -30 -25 -30 -105% -35 -110% Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2018 2018 2018 2019 2019 2019 2019 2020 2020 2018 2018 2018 2019 2019 2019 2019 2020 2020 2018 2018 2018 2019 2019 2019 2019 2020 2020 Q2 2020 NPL revaluation Q2 2020 NPL revaluation and REO impairment accrual 10 * Excluding NPL revaluation in Q2 2020 ** Adjusted for NPL revaluation and REO impairment accrual in Q2 2020

NPL – Capex mainly deployed in Nordic forward flow deals NPL collection on own portfolios Quarterly NPL investments (EUR million) (EUR million) 61 149 54 54 54 52 50 95 40 90 85 31 62 25 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 ESP NOR DEU SWE ITA FIN 11

More balanced cash flow in second half of 2020 NPL investments and Cash EBITDA development • Growth fueled by high investments over the last (EUR million) years 149 • Commitments dropping significantly in Q3 2020 and onwards • Cash EBITDA expected to pick-up in H2 – as long 95 90 85 as countries continue to reopen 69 62 • With continued open markets, liquidity remains 53 52 48 46 satisfactory 34 35 30 31 • Deleveraging expected over the coming quarters Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 NPL capex Cash EBITDA less interest expense Committed capex 12

3PC – temporary suspensions to collection services T otal revenue 3PC • 3PC negatively affected by Covid-19 situation in Q2 18 (EUR million) • Temporary collection suspension in Italy and Spain 16 16 16 • Temporary suspension of field services in Germany 15 14 14 13 13 Weakened NOK causes negative translation effects for the less • 12 12 12 affected Norwegian operations 10 • Potential for higher demand post-crisis 10 8 • The finance sector accounts for approximately three quarters of the 3PC revenue 6 Economic repercussions are expected to increase volume of • 4 non- performing loans at customer’s balance sheets 2 • Continued focus on combined forward flow and 0 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 3PC deals 2018 2018 2018 2019 2019 2019 2019 2020 2020 13

REO – Disruption from lockdown in Spain REO total revenue development • Revenue shortfall in the quarter (EUR million) • REO segment particularly affected as closure of public notary offices postponed completion of REO sales 7 388 30 8 000 Most REO revenue stems from sales signed in the first • 6 323 7 000 6 161 quarter with completion and realization in the second quarter 5 773 6 000 5 130 • 256 units sold in Q2, down 17% from Q1 20 4 612 5 000 4 024 • Average unit price of EUR 26k 3 740 3 489 4 000 3 000 10 2 000 1 000 22 19 20 25 25 20 21 12 7 0 0 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2018 2018 2018 2019 2019 2019 2019 2020 2020 REO sales No. of assets in inventory 14

Contribution per segment Contribution per segment* T otal: (EUR million) - Excluding unallocated overhead cost Negative contribution margin in Q2 • 36 35 NPL: 34 31 - 1 1 2 29 3 6 25 Portfolio amortization and revaluation of EUR 42.1m (18.8) 5 4 • 8 1 1 20 4 5 18 Contribution margin of 33% (80%) 2 2 4 • Includes EUR 27.0 million in net negative revaluation 4 28 27 26 25 22 21 13 12 3PC: 2 4 -1 • 20% contribution margin (50%) REO: -27 • Reflects EUR 26.0 million impairment accrual -21 • Slightly negative contribution excl. impairment accrual Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2018 2018 2018 2019 2019 2019 2019 2020 2020 NPL portfolios 3PC REO portfolios Other *Contribution before allocation of local SG&A and IT cost, management fee, central administration costs, other gains and losses or finance costs 15 Segment contribution margin = Segment contribution/Segment net revenue Total segment contribution less unallocated cost = EBITDA

Net finance, tax and net profits Condensed Income statement (EUR thousand) • Total net financial cost of EUR 14.4m For the quarter end Year to date EUR thousand 30 Jun 2020 30 Jun 2019 30 Jun 2020 30 Jun 2019 Interest cost of EUR 13.9m • EBIT -32 577 23 748 -21 060 43 622 • EUR 0.4m net negative interest on deposits in group Financial revenue 201 29 9 934 43 Financial expenses -14 558 -13 961 -30 213 -25 878 multicurrency cash pool Net financial items -14 357 -13 932 -20 279 -25 835 • Average blended interest costs of approx. 5% Profit/(loss) before tax -46 934 9 815 -41 339 17 787 • Tax return of EUR 2.5m Tax (expense) 2 538 -3 661 393 -7 009 • Average tax rate expected to trend towards ~25% over time Net profit/(loss) after tax -44 396 6 154 -40 946 10 778 • Net loss of EUR 44.4m Net profit/(loss) to Non-controlling interests -17 722 1 549 -19 438 4 133 Net profit/(loss) to equity holders -26 674 4 605 -21 508 6 645 EUR -26.7m to equity shareholders • Earnings per share: basic -0,144 0,030 -0,120 0,043 EUR -17.7m to non-controlling minorities Earnings per share: diluted -0,137 0,026 -0,114 0,038 • 16

Outlook and Summary Q2 2020